Galloway Drug Rep Facing 10 Years for Insurance Fraud

CAMDEN - A pharmaceutical sales agent from Galloway faces up to 10 years in prison for scamming the health insurance plan for New Jersey state workers, and other insurers, out of nearly $500,000.

Andrew Gerstel, 39, pleaded guilty to a health care fraud conspiracy charge, according to information sent jointly by Acting New Jersey U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino.

Ten others have pleaded guilty in connection with the ruse.

In addition to a possible fine as high as $250,000, or twice the gross gain, Gerstel is required to forfeit $184,389.05 and pay restitution amounting to at least $483,946.72. His sentencing is scheduled for February 26, 2018.

Authorities said that the scam prompted more than $50,000,000 to be disbursed from the state worker benefits system to an out-of-state compounding pharmacy, much of which wound up in the pockets of people who obtained prescriptions for salves and mixtures that they didn't need.

Prosecutors said that between January 2015 and April 2016, Gerstel induced various people in New Jersey to obtain high-priced, medically-irrelevant paina creams, scar-concealers, libido salves, anti-fungal solutions and vitamin combinations from the compounding pharmacy, for which they were reimbursed thousands of dollars for one-month supplies.

The creams and salves were covered by state health plans held by state and local government workers, police, firefighters, teachers, and eligible dependents, authorities said.

Gerstel allegedly recruited them to obtain the creams under false pretenses, and submit documentation to the pharmacy benefits administrator, who would reimburse at the highest amounts. The compounding pharmacy operators received facsimiles of the prescriptions and billed the benefits administrator, authorities said.

Assistant U.S. Attorneys R. David Walk, Jr., and Jacqueline M. Carle represented the government in the proceedings. Gerstel was represented by Galloway attorney Ralph A. Paolone.